The International Monetary Fund (IMF) figures show that China became Vietnam’s biggest export market in 2017. The position had belonged to the US for the last 15 years.

Vietnam exported $35.46 billion worth of products to China in 2017

Tran Thanh Hai, deputy director of the Ministry of Industry and Trade’s (MOIT) Import/Export Department, confirmed that Vietnam exported $35.46 billion worth of products to China in 2017, a sharp increase of 61.5 percent over the year before.

China has outstripped Japan and South Korea to become Vietnam’s third largest textile & garment export market, consuming $3.45 billion worth of exports, up by 25.6 percent compared with 2016.

As for seafood, while texport growth to the US and EU has slowed, exports to China have been increasing rapidly. Catfish and fresh fruit to China soared sharply in the last months of 2017.

Hai said the Chinese economy has maintained a high growth rate, which has increased demand for farm and seafood produce. The production costs in China are on the rise, thus making Chinese-made products less competitive than imports.

Importing farm produce from Vietnam saves China transport costs as well because of the shared border line.

Meanwhile, analysts point out that protectionism pursued by the Trump administration has affected China’s trade policy. China is trying to fill the gap left by the US by strengthening its trade and investment in South East Asia, including Vietnam.

“US protectionism will reduce the benefits to Asian countries. So China will be a better market to exploit,” an analyst said.

Vietnam told to ease reliance

Le Dang Doanh, a renowned economist, believes that the IMF statistics showed higher exports to China because some goods across the border gates were counted as official exports.

“China is trying to foster official import/exports with Vietnam to ease trade across border gates,” Doanh said.

This means that the actual growth rate in exports is not as high as reported.

Doanh said that Vietnam needs to take full advantage to boost exports to China, which is predicted to become the largest economy in the world.

However, the US should be seen as an important trade partner of Vietnam, because the two countries have products that the other needs.

In addition, relying too much on one market is a taboo in trade, especially when the market is China is ‘as changeable as the weather’. In all cases, Vietnam needs to diversify its markets, experts say.